Coal Processing

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To ask Her Majesty's Government what percentage of the National Coal Board's total investment is devoted to coal processing schemes, including liquefaction; what further schemes are contemplated; when the schemes will begin; and by how much the percentage devoted to such schemes is expected to increase.

My Lords, the National Coal Board is currently spending about £18 million per year on the development of coal utilisation and conversion technology. This is roughly equivalent to 2 per cent. of annual investment and is not expected to increase significantly.

Later this year the National Coal Board plans to begin construction of a 2½-tonne per day coal liquefaction pilot plant at Point of Ayr in North Wales. Operation of this plant should begin in late 1987.

Trials will begin shortly on the board's new 12-tonne per day demonstration plant to make low-calorific-value industrial fuel gas from coal.

My Lords, I am grateful to the noble Lord the Minister for furnishing the information for which I have asked. I also apologise to him for bringing him here on a Friday morning. I asked for an available date and this is what they have done to me; I never expected this. However, I am very glad to meet the Minister and noble Lords on a Friday morning.

Is the Minister aware that I am completely dissatisfied with the Answer? Ever since 1924 I have sought to raise the question of the relationship between technical advance, scientific development and our remarkable assets in coal production. In view of the paucity of information on the developments that the National Coal Board intends to implement, is there any means of introducing onto the board of directors a number of technocrats, scientists and people who are associated with technical development, who can assist in building up a great manufacturing industry out of the processing of our coal assets? What is the use of proceeding in the future, as we have done for too long in the past, with the production of coal which is unprofitable? Bearing in mind geological faults, flooding and all the other problems, what is the use of proceeding along those out-of-date, outmoded lines when there is an opportunity to associate ourselves with scientific and technical development?

My Lords, I share the noble Lord's concern that this Question has come on on a Friday morning, but I can assure him that it is as great a pleasure to answer him on a Friday as it is on any other day. Perhaps I may tell him that one of the aspects which has to be borne in mind is the general cost, and the current estimates suggest that synthetic crude oil from United Kingdom coal would cost about 60 dollars per barrel, while substitute natural gas would cost about 50p per therm at the conversion plant site. Those are significant factors, but that does not mean that both the National Coal Board and the British Gas Corporation have not made considerable progress with their research. Indeed, the Government fully supported the original design studies for a larger 25-tonne per day coal liquefaction pilot plant, but process uncertainties dictated a more modest pace of development. However, the Government are still interested and will still support the National Coal Board on this.

My Lords, is the noble Lord the Minister aware that I am fully cognisant of the excessive costs involved? I discovered this in 1924 when, after Lloyd George had abandoned a scheme of his own, I introduced a pilot scheme, when I was able to get £30,000 from the then Chancellor of the Exchequer, Philip Snowden. Then it disappeared. I know that the cost is excessive; but let us compare the cost with the provision of new machinery introduced into the pits, wage costs, the difficulties associated with geological faults, and the rest. We must, I suggest, proceed with a scheme of the kind which is being partly developed by the Coal Board, though not to the extent that is necessary, in order to use our assets advisedly.

My Lords, I defer to the very great experience of the noble Lord, and I am sure that we are all well aware of his great knowledge on this subject. As regards advanced power generation, the National Coal Board, British Gas, the CEGB, and the Department of Energy are collaborating in two engineering studies of low-pollution power generation based on advanced coal gasification and pressurised fluid-bed combustion technologies. These studies, including estimates of generation economics, will be completed in mid-1986. So we are making some progress.

My Lords, obviously I shall wish to check my facts on this, but my recollection from my own days as a Minister at the Department of Energy is that we were in the lead as regards those researches. I think that we are ahead of our Common Market partners, but I shall check that and perhaps I may let the noble Viscount know.

My Lords, would not the noble Lord agree that, as usual my noble friend Lord Shinwell is on a good point and is very forward looking? Is not what he is saying that coal is not only for burning, and that with our oil resources depleting at quite a sharp rate by 1995 now is the time to invest in research not only into liquefaction and gasification but also in respect of getting the by-products of coal, which of course when oil runs out will be much more expensive and worthwhile producing from coal?

My Lords, I would not disagree with the noble Lord. These objectives are important and the Coal Board at the present moment is following the lines which the noble Lord suggests. There is a great deal of research and development taking place but we must keep this in perspective. Part of this perspective must be that at the present moment it would not be economical to suggest that coal synthetically treated as the noble Lord suggests would be in any way competitive with what is already available. That is part of the equation.

My Lords, may I ask my noble friend about a point that he missed before? Could we not send a mission to South Africa to learn from their techniques to the benefit of ourselves so that we could advance our technology more rapidly here?

My Lords, I am asking that it should be sent. I ask my noble friend seriously. We want to advance in this field. The noble Lord, Lord Shinwell, has a good point here. Can we not send a mission? We know that they use these processes on a large scale in South Africa. Is it not worth our while to send a mission there? Would my noble friend please look into that and see whether it can be done?

My Lords, I shall certainly pass on the views expressed by my noble friend. It might be that there could be private sector interests which might be interested in exploring the possibilities of South African technology.